Scribd Logo
Upload

Welcome to Scribd!

  • CFS Subsequent To Date of Acquisition

    Uploaded by

    Gorden Kafare Bino
    133 views2 pages
    P Company acquired 80% of S Company on January 1, 2014. The document provides trial balances for P Company and S Company for 2014 and 2015, including fair values of S Company's assets and liabilities on the acquisition date. It asks to prepare journal entries for P Company's investment, consolidated working papers for 2014 and 2015, and calculations of consolidated retained earnings, shareholders' equity, net income, and non-controlling interest for 2014 and 2015.

    Original Description:

    advance financial accounting 2

    Original Title

    CFS subsequent to date of acquisition

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    P Company acquired 80% of S Company on January 1, 2014. The document provides trial balances for P Company and S Company for 2014 and 2015, including fair values of S Company's assets and liabilities on the acquisition date. It asks to prepare journal entries for P Company's investment, consolidated working papers for 2014 and 2015, and calculations of consolidated retained earnings, shareholders' equity, net income, and non-controlling interest for 2014 and 2015.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    133 views2 pages

    CFS Subsequent To Date of Acquisition

    Uploaded by

    Gorden Kafare Bino
    P Company acquired 80% of S Company on January 1, 2014. The document provides trial balances for P Company and S Company for 2014 and 2015, including fair values of S Company's assets and liabilities on the acquisition date. It asks to prepare journal entries for P Company's investment, consolidated working papers for 2014 and 2015, and calculations of consolidated retained earnings, shareholders' equity, net income, and non-controlling interest for 2014 and 2015.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 2

    Advanced Financial Accounting and Reporting II

    Consolidate Financial Statement – Subsequent to Date of Acquisition

    On January 1, 2014, P Company acquired 80% of the common stock of S Company for P372,000.
    On this date, the following assets and liabilities of S Company had book values that were
    different from their respective market values:
    Book value Fair value
    Inventory P24,000 P30,000
    Land 48,000 55,200
    Equipment 180,000 180,000
    Accumulated Depreciation – equipment (96,000) -
    Buildings 360,000 144,000
    Accumulated Depreciation – Buidings (192,000) -
    Bonds Payable (4 years) 120,000 115,200

    All other assets and liabilities had book values approximately equal to their respective fair
    values. On the date of acquisition, the equipment and building had a remaining life of 8 and 4
    years, respectively. Goodwill, if any, is reduced by a P3,750 impairment loss during 2014 based
    on the fair value basis (or full goodwill).

    The trial balance for the companies for the year ended December 31, 2014 are as follows:
    P Company S Company
    Cash P232,800 P90,000
    Accounts Receivable 90,000 60,000
    Inventory 120,000 90,000
    Land 210,000 48,000
    Equipment 240,000 180,000
    Buildings 720,000 540,000
    Investment in S Company 372,000 -
    Cost of goods sold 204,000 138,000
    Depreciation expense 60,000 24,000
    Other Expense 48,000 18,000
    Dividends paid 72,000 36,000
    Total P2,368,800 P1,224,000

    Accumulated Depreciation – equipment P135,000 P96,000


    Accumulated Depreciation – buildings 405,000 288,000
    Accounts Payable 120,000 120,000
    Bonds Payable 240,000 120,000
    Common Stock, P10 par 600,000 240,000
    Retained Earnings 360,000 120,000
    Sales 480,000 240,000
    Dividend Income 28,800 -
    Totals P2,368,800 P1,224,000
    The trial balance of the companies for the year ended December 31, 2015 are as follows:

    P Company S Company
    Cash P265,200 P102,000
    Accounts Receivable 180,000 96,000
    Inventory 216,000 108,000
    Land 210,000 48,000
    Equipment 240,000 180,000
    Buildings 720,000 540,000
    Investment in S Company 372,000 -
    Cost of goods sold 216,0000 92,000
    Depreciation expense 60,000 24,000
    Other Expense 72,000 54,000
    Dividends paid 72,000 48,000
    Total P2,623,200 P1,392,000

    Accumulated Depreciation – equipment P150,000 P102,000


    Accumulated Depreciation – buildings 450,000 306,000
    Accounts Payable 120,000 120,000
    Bonds Payable 240,000 120,000
    Common Stock, P10 par 600,00 240,000
    Retained Earnings 484,800 144,000
    Sales 540,000 360,000
    Dividend Income 38,400 -
    Totals P2,624,200 P1,392,000

    Prepare the following:


    1. Journal entries in the book of P Company to account for its investment in S Company.
    2. Prepare consolidated working paper on December 31, 2014 and December 31, 2015.
    3. Determine the following on January 1, 2014:
    A. Consolidated Retained Earnings
    B. Non-controlling interest
    C. Consolidated Shareholders’ Equity
    4. Determine the balance of the following on December 31, 2014 and December 31, 2015:
    A. Controlling interest in consolidated net income
    B. Non-controlling interest in consolidated net income
    C. Consolidated net income
    D. Consolidated retained earnings
    E. Non-controlling interest
    F. Consolidated shareholders’ equity

    You might also like